Rather than go to trial to defend its ginger content, Canada Dry ginger ale will no longer claim to be “Made from Real Ginger,” as part of a proposed settlement to a series of U.S. class action lawsuits over false advertising.

The company that makes the popular soft drink, Keurig Dr. Pepper, will also offer payments to people who purchased Canada Dry for personal use in the United States since 2013.

Those payments are capped at $5.20 per household without proof of purchase, and at $40 per household with proof of purchase, according to the proposed settlement, which does not apply to Canadian sales.

The company is now trying to give broad notice to anyone who might qualify for these payments, in anticipation of final court approval in April, according to Van Beckwith, a lawyer for Keurig Dr. Pepper.

A minuscule amount of a ginger flavour extract

That follows the decision of a California court last year to let the case proceed to trial, which was slated to begin this week. It would have aimed to resolve several related lawsuits from various states, from Massachusetts to Missouri.

The New York lawsuit, for example, alleges violations of state business law including “common law fraud, deceit and/or misrepresentation, breach of express and implied warranties and unjust enrichment.”

As a brand, Canada Dry dates to the 1890 opening of a carbonated water plant in Toronto by John J. McLaughlin. His “Canada Dry” Pale Ginger Ale was widely sold in Canada by 1904, and soon expanded to New York, where it was a popular mix for home brew liquor during Prohibition, and globally by the 1930s. New York remains its retail “heartland,” according to court records.

Today, Canada Dry is made with carbonated water, high fructose corn syrup, citric acid, preservatives and natural flavours, which one of the lawsuits claims include only “a minuscule amount of a ginger flavour extract.” Research by the New York complainant’s lawyer pegs the actual ginger compound content of Canada Dry at two parts per million, which is below the threshold for human taste, and far lower than any amount that could have health benefits.

Health benefits are a key aspect of the dispute. Flat ginger ale is a common folk remedy for an upset stomach, for example, and lawyers in the New York case have claimed Keurig Dr. Pepper added the “Real Ginger” claim to the labelling to “cultivate a wholesome and healthful image.” The aim, according to the lawsuit, was to position Canada Dry as a “BFY” option, meaning “Better For You.”

The claims on packaging 'deceive and mislead reasonable customers'

This included a television ad, “Jack’s Ginger Farm,” about a woman taking a ginger ale out of a cooler at a picnic and finding it was connected, through the ground, to a handsome ginger farmer.

It appears to have worked. Court records in the New York action allege Keurig Dr. Pepper saw sales increase by almost 9% in just the first six months of adding the “Made from Real Ginger” claim to the packaging.

The California judge cited internal company documents that suggested 30% of Canada Dry consumers who increased their consumption did so because of expected health benefits from real ginger.

“In truth, DPSG’s soft drink is not made from real ginger,” reads the claim in New York District Court. The claims on packaging “deceive and mislead reasonable customers into believing that (Canada Dry is) made using ginger root — i.e. the spice made by chopping or powdering the root of the ginger plant — and not minuscule amounts of flavouring ‘extracts.’”

This lawsuit was brought by Julie Fletcher of Bolivar, N.Y., near the border with Pennsylvania. She claimed to have often bought it for her sick children, thinking it was a “healthier alternative to regular sodas.”

Katie Gilroy, director of corporate communications at Keurig Dr. Pepper, did not respond before deadline to a request for comment.